Zions Bank launches no-overdraft-fee account to help bring underserved consumers financial stability

Overdraft protection is designed to help consumers cover a charge when their bank account dips below zero — saving them the inconvenience and embarrassment of a rejected payment. A 2020 Morning Consult survey found that 89% of adults find the service valuable. But for low-income households, overdraft fees can be a major hurdle to having a bank account.

Zions Bank is among a growing number of financial institutions working to address the needs consumers who may find themselves priced out of traditional banking products. Today Zions Bank announced that it has received Bank On certification for its newly launched no-overdraft-fee bank account from the Cities for Financial Empowerment Fund.

The product, called OnBudget Banking, helps keep customers aligned with their financial goals with a predictable monthly service fee of $5, mobile banking and no overdraft fees. The checkless account offers a Visa® debit card for making payments and accessing funds.

The national Bank On certification recognizes that the account meets standards around affordability and functionality created by consumer advocates, nonprofit organizations and civic leaders.

OnBudget Banking fills a gap for segments of consumers, including the unbanked and underbanked, who cite in a 2019 FDIC survey common reasons for using nontraditional deposit accounts, like not being able to meet the minimum balance requirement and unpredictable fees.

“Bringing financial solutions to consumers on all rungs of the economic ladder is an industry-wide effort to promote economic inclusion,” said Scott Anderson, Zions Bank president and CEO. Anderson is chair-elect of the board of directors of the American Bankers Association, which has urged banks across the country to do more to help meet the needs of individuals and families working paycheck to paycheck.

“Without access to a basic deposit account such as OnBudget Banking, families often turn to costly alternatives like payday lenders and check-cashing services, which leave them stuck in a cycle of debt,” Anderson said.

An estimated 5% of U.S. households are unbanked, meaning no one in the household has a checking or savings account, while another 11% are underbanked, lacking sufficient access to mainstream financial services, according to the FDIC.

The FDIC survey also reveals racial disparity between bank account holders. Nationally, 48% of Black households and 42% of Hispanic households are unbanked or underbanked, compared to less than 14% of white households.

The average unbanked person spends 5% of net income on unnecessary fees for alternative financial services. Without a bank account, a family lacks the ability to save reliably or automatically, and unbanked people are more likely to be victims of crime.

Achieving Bank On certification is part of Zions Bank’s ongoing commitment to furthering economic inclusion. The company recently launched a Supplier Diversity Program aimed at bringing more diverse businesses to its supply chain and a Small Business Diversity Banking program, expanding credit access to small businesses owned by ethnic minorities, women and veterans.

About Zions Bank

Zions Bank is Utah’s oldest financial institution and is the only local bank with a statewide distribution of branches, operating 96 full-service branches. Zions Bank also operates 26 full-service branches in Idaho and one in Jackson, Wyo. In addition to offering a wide range of traditional banking services, Zions Bank is also a leader in small business lending and has ranked as the No. 1 lender of U.S. Small Business Administration 7(a) loans in Utah for the past 27 consecutive years. Founded in 1873, Zions Bank has been serving the communities of Utah for more than 145 years. Additional information is available at www.zionsbank.com. A division of Zions Bancorporation N.A., Member FDIC.

About Bank On

Bank On coalitions are locally-led partnerships between local public officials; city, state, and federal government agencies; financial institutions; and community organizations that work together to help improve the financial stability of unbanked and underbanked individuals and families in their communities. The Bank On national initiative builds on a grassroots movement of over 85 coalitions in cities across the country, offering national account standards, capacity grant support, pilot funding, and a learning community. In addition to connecting unbanked individuals to accounts, Bank On programs raise public awareness, target outreach to the unbanked, and expand access to financial education. Visit www.cfefund.org/bankon for more information.